Facebook is Building Feature to Let Users Subscribe to News Publications

By Deepa Seetharaman and Lukas I. Alpert

Facebook Inc. may soon help its users do something unfamiliar on the platform: pay for news.

The social-media giant is building a feature that would allow users to subscribe to publishers directly from the mobile app, according to people familiar with the matter. The feature, long-requested by publishers, is expected to roll out by the end of 2017, three of the people said.

Many details remain up in the air, but discussions have centered around making the feature available only on stories published natively to Facebook through its Instant Articles product. Talks have also focused on how to structure the arrangement, with Facebook leaning toward a metered-payment model, which would allow users to read some articles for free each month before prompting them to pay, three of the people familiar with the matter said.

Another point under discussion is how payments would be processed and whether Facebook would get a cut of the revenue. One model being looked at is to have Facebook take payment information but let publishers keep all the money, some of the people said.

“We’re working with partners to understand their business and explore ways we can help them drive more value from Facebook. We are taking the time to deeply understand their different goals and needs,” Facebook said in a statement.

The new feature would be a boon to publishers who are increasingly emphasizing digital subscriptions to power revenue growth, including the The Wall Street Journal, the New York Times, the Washington Post and the Financial Times.

Publishers have long been frustrated by Facebook’s outsized role in news dissemination and commanding presence in the digital advertising market. The dominance of Alphabet Inc.’s Google and Facebook in online advertising — they are expected to receive more than 60% of U.S. digital ad spending this year, according to eMarketer — is one reason many newspapers now see subscription growth as paramount.

“Helping news publishers get paid for their digital content is arguably the most meaningful help that Facebook could provide to global journalism,” said Jim Friedlich, chief executive of the foundation behind the Philadelphia Inquirer, which has lobbied Facebook hard for the initiative. “If Facebook truly creates a successful platform for the sale of news subscriptions at scale it will be a powerful and historic game changer for the news industry.”

He argued that such a change would likely be hugely beneficial to local and regional publishers “who have been less successful than national news enterprises in building revenue beyond print.”

Top publishers urged Facebook to include a subscription option on Instant Articles before the format’s launch in May 2015. At the time, Facebook employees studied different subscription models, such as prompting users to visit a publisher’s website and subscribe after they have read a certain number of articles, according two people familiar with matter.

The idea didn’t get off the ground partly because Facebook didn’t want to introduce barriers between its users and content, one of the people said. One of the goals of Instant Articles, in which media outlets publish stories directly on Facebook instead of linking back to their sites, was to speed up load times on mobile.

But many publishers found they weren’t making as much money on Instant Articles as on their own sites, due to Facebook’s restrictions on the number and types of ads, according to a January report from Digital Content Next, a trade group for digital-content companies. Publishers are also experimenting with new rival offerings from Apple Inc. and Google.

In response to mounting frustration and competition, Facebook eased some of its ad restrictions on Instant Articles. In April, it added a new tool so publishers could encourage readers to sign up for their newsletters. Facebook executives also warmed to the idea of driving subscriptions through Facebook and started working on a “payment system” more seriously, the people familiar said.

One of the people familiar with the matter said Facebook is likely to allow users to read 10 articles free before prompting them to subscribe, mirroring the approach of news organizations like the New York Times and the Washington Post. This model is likely to be a point of contention between Facebook and publishers with stricter paywalls, including The Wall Street Journal and the Financial Times.

Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com and Lukas I. Alpert at lukas.alpert@wsj.com

Breaking the story

Deepa Seetharaman and Lukas I. Alpert were ahead of competitors with the news that Facebook Inc. is building a feature to allow its users to subscribe to publishers directly from the mobile app. According to sources, the feature is expected to roll out by the end of 2017.

Timeline

June 12, 2017, 12:21

Facebook is Building Feature to Let Users Subscribe to News Publications – Sources

June 12, 2017, 12:21

Facebook Subscription Support for News Expected to Roll Out By End of 2017 – Sources

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